Azure crosses 50% of all cloud revenue, AI products see sharp organic growth

For the first time, Azure accounted for 50% of the total Microsoft Cloud’s $110 billion in annual revenue in constant currency. The announcement was made by Microsoft chief executive officer Satya Nadella at the quarterly result declaration.

“Azure continues to take share as customers migrate their existing workloads and invest in new ones. We continue to see more cloud migrations as it remains early regarding long-term cloud opportunity,” he added.

For the quarter ending June 30, Microsoft reported a revenue of $56.2 billion up by 8% from the last fiscal year. It was driven by Microsoft Cloud’s revenue of $30.3 billion, up 21% year on year. The revenue of Microsoft Intelligent Cloud unit which has the Azure cloud computing rose by 15% to 24 billion in the quarter. 

Nadella also said that Microsoft’s customers are leveraging the next generation of artificial intelligence (AI) to address opportunities and challenges they face. “We remain focused on leading the new AI platform shift, helping customers use the Microsoft Cloud to get the most value out of their digital spend, and driving operating leverage.”

The Azure OpenAI Service, which offers access to several large language models and tools, is being used by more than 11,000 organisations across industries including Volvo Group, IKEA, and Flipkart, among others. On average, 100 new customers were added every day this quarter, the company spokesperson said. This week, Genpact became the latest company to partner with Microsoft to tap onto the large language model APIs available through Azure OpenAI Service. Further, last week Meta announced that its latest language model Llama will be available through Microsoft Azure.

Further, Microsoft said that AI pair programmer GitHub Copilot and VS Code have emerged as category-leading products for developers. The GitHub Copilot tool has registered strong organic interest going by the self-service sign-ups. More than 27,000 organisations are using GitHub Copilot for Business; this is up two times, quarter on quarter.